THE Energy Transition Mechanism (ETM) can help the Philippines achieve its energy transition goals while also unlocking more investment in renewable energy, an Asian Development Bank (ADB) expert said.
Dion Camangon, senior Public-Private Partnership specialist at the ADB said during the Willis Towers Watson Asia Power and Energy Conference in Taguig on Tuesday that large-scale solutions are needed to accelerate the decarbonization and growth of clean energy in developing countries.
ETM is a market-based approach to fast-track the transition from fossil fuels to clean energy.
Under this mechanism, developing countries can avail of refinancing to effect the early retirement of coal-fired power plants and reinvest the proceeds in developing renewable energy.
Tapping the ETM, Mr. Camangon said, will involve a comprehensive approach involving the community, policy and partnerships.
In the Philippines, ACEN Corp. has completed the world’s first market-based ETM transaction.
The company announced last year that it has completed divesting from a 246-megawatt coal-fired power plant operated by subsidiary South Luzon Thermal Energy Corp.
This allowed the early retirement of the plant, bringing ACEN closer to its target of 100% renewables.
Under ETM, the coal-fired plant’s operating life of up to 50 years was cut in half, eliminating about 50 million metric tons of carbon emissions, the company said.
ACEN has said that it received P7.2 billion from the transaction to reinvest in renewable energy projects, which it used to refinancing debt and pay transaction fees.
John Philip S. Orbeta, chief administrative officer and chief risk officer of ACEN, said that the company is bullish on its renewable energy target of 20 gigawatts in capacity by 2030, while also achieving net zero goals. — Ashley Erika O. Jose